If you’ve seen a board game Kickstarter meet or even exceed its funding goals, you might be under the misconception that that’s all you need. A board game funded at 600% should be fine, right?
If you’ve been following the story of the Darkest Dungeon Board Game, you might have realized that it’s not so simple. Mythic Games raised over 5 and a half million dollars for an adaptation of the hit board game, beating their funding goal with 1885% funding. However, five years later, only a tiny percentage of backers received their game—and Mythic Games itself was ordered to be liquidated in October of last year. It goes beyond just one game: between 2020 and 2022, Mythic Games ran a total of six Kickstarter campaigns, raising a total of 12 million dollars… and none of them ever saw complete fulfillment.
During the same time period, Cephalofair, Awaken Realms, Restoration Games, and Go On Board ran similarly massive campaigns, with none of the same fulfillment issues. CMON Games, who faced similar issues with fulfillment despite raising millions in Crowdfunding, found a way to stay solvent—though it required them to sell huge chunks of their IP and bring in several new investors. (Though Mythic did sell their IP as well—to CMON, no less—which sparked a great deal of backlash.)
Why did CMON and Mythic struggle so much? And what can you do to avoid similar problems?
Unexpected Costs
The big problem with unexpected costs is that they’re unexpected. But sometimes, you can see some of those costs coming, and forging ahead without keeping them in mind is a surefire way to cause your own failure.
A successful Kickstarter is not a license to spend money like water; fulfilling a Kickstarter is much more expensive than you might realize. If you haven’t properly calculated the costs ahead of time, you run the risk of the pipe running dry long before you’ve delivered on your promises.
Leonidas Vespirini, co-founder of Mythic Games, spoke to BoardGameWire about his thoughts on what went wrong with Mythic’s Kickstarters. Here’s what he had to say:
“...we should have been more cautious and less confident in our model. We should have kept a tighter rein on our operating costs and found other sources of revenue, perhaps retail, sooner. We probably hired too many people, and these high operating costs condemned us to numerous and ambitious crowdfunding campaigns, where the slightest crash could have serious consequences.”
Mythic Games got reckless with their spending, running at razor-thin margins where the slightest thing going wrong could collapse the whole edifice. And when things did go wrong—such as, for instance, inflation, rising manufacturing costs, and rising shipping prices caused by COVID and the Russian invasion of Ukraine—they didn’t have the resources to pivot.
Undiversified Revenue Sources
One of Mythic Games’ other mistakes is that they relied entirely on a Kickstarter-only model for their business. While Gloomhaven and Frosthaven made huge splashes in retail, allowing Cephalofair to bank extra funds for any surprise Kickstarter costs, Mythic had none of that. Even CMON Games has a retail presence, with games such as Cthulhu: Death May Die or Zombiecide—the IPs to which have since been sold off, but crucially already had outside profit sources before sale—gracing shelves in local game stores. But Mythic didn’t have that backstop.
Without any other way to bring in money, any additional funds required them to either ask their backers for more money than originally promised (which cost them a significant amount of goodwill) or run another Kickstarter for another game (which came with its own costs).
In short, they accidentally backed themselves into a bit of an inverse-Ponzi situation where the resources from each Kickstarter were necessary to fulfill the previous one, only they were the ones holding the bag.
Too Many Large-Scale Kickstarters, Too Fast
As part of their financial reset, CMON Games has stated that they were going to pivot from large-scale miniatures games to small-box games that would be sent direct-to-retail. As we noted in our previous post about Super Meeple’s distribution system, too many big games can glut the market and cause diminishing returns. Sales in expert games are declining, and retail stores live and die on their small-box games. In the words of Super Meeple’s annual Facebook post, “...this foundation [of companies not overproducing] is generally, if not always, supported by family games; games with ‘infinite’ sales potential.” So if you don’t have a genre-defining hit like CATAN or Wingspan, your company needs small-box games to survive.
A quick look at Mythic Games’ Amazon Profile shows that their smallest game, Enchanters, is no longer being sold. Secondhand versions are available in stores or online for prices ranging from $18-60, but the game was released in 2016 (with a deluxe edition releasing in 2020). The other games seen on their website are at middle-weight or higher, clocking in at $50 on the low end. This meant that every game was risk after risk, with no safe options, all taken within the same 2-year period.
Vesperini is quoted as saying, “be careful and diversify. Start small, have small structures to be flexible. Don’t try to grow too fast,” which is exactly what CMON is pivoting to. Everyone dreams of being the next Gloomhaven, but if you start with being the next Sagrada first… well, you probably won’t be Sagrada, but you’ll have a lot more capital to work with.
What Can We Learn from CMON and Mythic?
The major lessons from Mythic and CMON’s problems have a bit less to do with running Crowdfunding specifically and more to do with generally running a board game business. Most of them come down to the same lesson: “Don’t put all your eggs in one basket.”
- Make sure you have other, stable means of funding secured so your company isn’t entirely dependent on the Kickstarter to live or die.
- Don’t send every Kickstarter at the same audience, and definitely don’t wear them out with too many releases too quickly. (This is one basket that could probably use fewer eggs.)
- Don’t cut your margins so thin that an increase in costs will send your project into insolvency. Pay attention to the market and what might be coming down the pipe, or what’s already happening.
If you have a crowdfunding campaign coming up, and you need to make sure that it succeeds in its funding and its distribution, Game Brands can help. Contact us today to get started and learn how to turn your game from a paper design to a full package in your customers’ hands.
